Jan 31, 2009

Columnists - Vir Sanghvi;The elusive clout of media barons

I ran into Rajat Sharma, anchor and effective proprietor of India TV, the other night. Rajat is one of the pioneers of Hindi news journalism but when he started his own channel a few years ago, he found that the going was tough. At one stage, he said, the situation was so desperate that the channel had no money to pay salaries and he and his wife had to dispose of personal assets to pay his staff.

India TV is now doing well—it is currently the No. 1 Hindi news channel in the country—and the profits are rolling in. But Rajat says that he is astonished by the enthusiasm of some new entrants in an industry where it is so difficult to make any money at all—and so easy to go bust. He says that he keeps running into people who say they want to enter the media or start a TV news channel because they believe it will give them clout and influence. He has told them that it is a hard, largely unprofitable grind and that all talk of media clout is rubbish. He runs a successful channel but he does not believe that his clout has increased because of India TV. Nor does he believe that anybody who owns a TV channel has gained in influence because of the channel. I thought about what he had said and decided he was probably right. There has never been any shortage of rich people who are dying to enter the media because they believe that ownership of a newspaper or a channel gives them power and influence.

And yet, it is hard to think of anybody who has become powerful on the basis of media ownership. On the other hand, I can think of many rich people who have been burnt by their enthusiasm for the media. In the 1980s, Vijaypat Singhania started The Indian Post, a Bombay newspaper. Not only did it make no difference to the clout of the JK empire, but it actually backfired on Vijaypat. Satish Sharma, who was then a powerful man, blamed him for every negative article that appeared and forced him to sack his editor. Eventually, the newspaper closed down.In the 1990s, the late L.M. Thapar’s passion for newspapers led him to make vast investments in The Pioneer, which launched a much-feted Delhi edition. Not only did the paper fail to make any money but it did nothing for Thapar’s clout. Eventually, the Thapars sold it to Chandan Mitra who is doing a much better job of running it. Most celebrated of all is the case of Dhirubhai Ambani who bought the Sunday Observer from Ashwin Shah of Jaico and launched a daily paper called The Business and Political Observer. The Sunday Observer was successful in its Jaico avatar but it never worked as an Ambani operation. The daily paper was an embarrassment and far from adding to Reliance’s clout, it actually became a liability for the Ambanis.In recent times, the focus has shifted to television. Many industrialists believe that ownership of a TV channel will ensure that ministers and bureaucrats will kowtow to them. In fact, not one businessman has been able to launch a top-class channel no matter how much money has been blown up. In the days when Subroto Roy was flush with funds he imagined that his Sahara TV empire would top the ratings because of the vast amounts he spent on programming. In fact, the channels never did particularly well. And when Sahara’s fortunes changed after the fall of the NDA government, the so-called clout of the TV empire was shown to be illusory as Roy struggled with adversity. My sense is that ownership of a TV channel can actually be a problem, rather than an advantage. For many years, I was associated with the Star TV network. At the time, Star had a terrific news channel and for part of this period, the No. 1 entertainment channel. But I never had the sense that Star had any clout at all. Every minister and bureaucrat would push Star around. One chief executive was threatened with legal action and possible imprisonment. Licences were routinely denied. Uplinking was always a problem. And the government acted as though Star should be grateful for being allowed to exist at all. Nothing has changed since those days. At the fringes of the Hindi news market are many small TV channels, some of them backed by medium-sized businessmen in search of influence. My guess is that most of these channels will not survive the current slowdown. But even while they exist, it is hard to see what they have done for the clout of their owners. You could argue that this is only true of new entrants and that the existing media houses have vast influence. But even this is dubious. Everybody who is anybody in Delhi political circles reads The Indian Express. Nevertheless, the Express’ Delhi offices were sealed by the Delhi Development Authority (DDA) for reasons that most people regarded as flimsy. The clout of the media made no difference.Or take an even better example. The most important media house in the country today is Bennett, Coleman and Co., owner of The Times of India, Economic Times etc. But, in the mid to late 1990s, all of The Times of India’s influence could not prevent the needless harassment of Ashok Jain, head of the family that owned Bennett. We know now that at least one of the officials who persecuted Jain was a crook because he was later arrested on corruption charges. But no matter how much the Times protested, Enforcement Directorate officials hounded Jain almost to his death.If the Times cannot use its own clout to defend its owner, then what sense does it make to talk of the power of media barons?So why do rich people get attracted to the media? It’s the glamour, I think. It’s the same syndrome that causes businessmen to invest in Bollywood films. They think that some of the glamour will rub off on them. In fact, it is their wealth that rubs off on Bollywood’s glamorous people.So it is with the media. Believe the hype about power and clout and you will end up poorer and still entirely without influence.